In a realistic appraisal of the CVSR we should note the following:
· An investment of $1.6 billion 250 MW breaks down to an extravagant $6,400,000 per megawatt.
· The Solar Ranch covers 1,500 acres.
· The CVSR is projected to produce 482,000 MWh per year, implying an operating capacity factor of around 22%.
· Given a reasonable appraisal of the value of 482,000 MWh per year, it is not possible that the solar panels will be able to provide a return sufficient to pay back the $1.6 billion investment within their functional life (not even close), even when ignoring annual operating and maintenance costs. Hundreds of millions of dollars will be lost (see Updated CSVR Cash Flow).
A much more viable alternative to a solar generation facility, although not the only one, is a plant using natural gas. A natural gas combined cycle gas turbine (CCGT) facility capable of 250 MW would have required less than one-fourth the capital investment, would be capable of making four times the electricity per year at 88% capacity factor, and would fit on a single acre.
Also, a CCGT facility could have been located closer to the point(s) of actual use of the electricity, and could provide dispatchable energy which could be increased or decreased as demand fluctuates; something the solar facility is incapable of providing.
So why is this project even happening? Because most of the project was funded by a taxpayer-gauranteed loan. And then many of the players got direct subsidies and tax breaks. And finally the electricity from the project gets bought at an above-market subsidized rate.